JPMorgan: Corporations will not buy Bitcoin after Tesla’s move

JPMorgan analysts suggested that major companies would not follow Tesla’s lead and would not invest in Bitcoin due to the asset’s high volatility. Bloomberg reports.

According to strategist Nikolaos Panigirtzoglou, corporate portfolios typically consist of bank deposits and short-term bonds, which show annual fluctuations of about 1%.

JPMorgan is confident that adding Bitcoin “would entail a substantial increase in the volatility of the entire portfolio.”

“Regardless of how many corporations follow Tesla’s lead, there is no doubt that the breakout of digital gold above $40,000 has been driven by the company’s statement. The rally’s durability will depend on less speculative institutional investments,” said Panigirtzoglou.

On February 8 it was announced that Tesla invested $1.5 bn in Bitcoin, after which the asset’s price began to rise sharply and in less than a day surpassed the $48,000 mark. At the time of writing, the first cryptocurrency was trading around $45,300.

Former head of the Office of the Comptroller of the Currency (OCC) in the U.S. Treasury Brian Brooks called Tesla’s Bitcoin investment captivating and terrifying at the same time.

Former Goldman Sachs investment chief Gary Black sold shares of the EV maker after the company shifted part of its reserves into digital gold.

In January, JPMorgan analysts opposed Bitcoin as an alternative to gold and described the digital asset as riskier than the precious metal.

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